Economy
What is Capital Gains Taxation and How to Optimize it?
If you have ever traded any securities on the capital markets, chances are that you have paid capital gains taxes before, provided the country of your residence levies such taxes.
Capital gains taxes are levied on the profit generated by buying and selling a particular asset or financial security.
For example, if an investor buys 10 Apple stock for $200 per share and then sells the entire investment for $220 per share, the taxable profit is $200.
Taxes on FX gains are levied at different rates, depending on the length of the holding period of the investment. Long-term capital gains taxes are levied after at least 12 months of holding an asset, while anything less is treated as a short-term capital gain.
In order to better understand how capital gains taxes work and how to optimize your strategies against them, we can look at several examples below.
Example 1 – Long-term capital gains tax
Long-term capital gains taxes in the United States are levied at a rate of 0%, 15%, or 20%, based on income levels and filing status.
Typically, long-term capital gains taxes are levied on asset sales after at least 12 months from purchase. Therefore, if an investor sells an asset 2 years after purchase, the profit will be treated as a long-term capital gain and taxed accordingly.
In other countries, long-term capital gains may have a flat tax rate. For instance, France upholds a long-term capital gains tax of 30%, regardless of the type of instrument.
Example 2 – Short-term capital gains tax
If we look at an example of short-term capital gains taxation, we can see that short-term gains are much easier in terms of tax handling, particularly in the United States, where short-term capital gains are taxed at the ordinary federal and state income tax rates.
For example, if an investor buys $100,000 worth of shares and sells them at a 10% profit in 6 months, the $10,000 difference would be taxable at a rate of 22%, assuming the investor has no other sources of income.
In general, the federal taxes levied on short-term capital gains range from 10% to 37%, with an additional state tax based on place of residence.
Are capital gains taxes universal?
Similarly to any other type of tax levied by governments, capital gains taxes can differ considerably based on the jurisdiction where you reside.
For example, short-term capital gains taxes in the United States are charged at the ordinary income levels, which means that the taxes on short-term capital gains are levied at rates between 10% on the lower end and 37% on the higher end.
On the other hand, a number of countries do not charge capital gains taxes at all. Some such jurisdictions include: Switzerland, Singapore, the UAE, Monaco, Malaysia, Belgium, New Zealand, and more.
In most cases capital gains taxes are levied at income tax levels, while in some cases, they are entirely separate and taxed at a separate, but smaller, rate.
Optimizing your capital gains tax
A key difference between capital gains and other taxes is that capital gains taxes can be optimized, leading to a smaller tax burden overall.
There are several ways of optimizing your capital gains taxes, especially if you reside in the United States and have a SSN, as a number of tax-advantaged investment accounts are available to US residents and citizens, such as: The 401(k), Roth IRAs and Regular IRAs.
In the United Kingdom, you can choose an Individual Savings Account, or ISA. These accounts allow you to close your investments tax-deferred, meaning you do not have to pay capital gains taxes when using them.
Another strategy you can use is tax-loss harvesting, which is done by selling losing investments to offset taxable capital gains. If losses exceed gains, many jurisdictions allow to carry forward excess losses to future years. However, it is also worth noting that tax-loss harvesting can only be done up to $3,000 in the United States.
Conclusion
Capital gains taxes are levied on the profit generated by buying and selling financial securities and other assets.
The rates of capital gains tax differ considerably between jurisdictions and some countries do not levy capital gains taxes at all.
In general, there are two types of capital gains taxes – Short-term and longterm. In most cases, short-term capital gains are taxed as ordinary income, while long-term capital gains taxes are treated as a distinct subcategory of income tax.
For those seeking to optimize their capital gains taxation to avoid overpaying, they can use strategies, such as tax-loss harvesting up to a certain point, or invest and trade using a IRA or other tax-deferred investment/savings account.
By Adedapo Adesanya
US sanctioned Russian oil giant Lukoil, will sell its foreign assets, including those in Nigeria and five other countries, to the US investment firm, The Carlyle Group.
According to an announcement on Thursday, Lukoil reached an agreement with the US investment firm on the sale of Lukoil International GmbH, the holding company that owns the group’s non-Russian international assets.
These foreign assets include shares in oil fields and refineries across the globe, including in Iraq, Azerbaijan, Egypt, the United Arab Emirates (UAE), Nigeria, and Mexico.
The sale follows the US sanctions on Lukoil and Rosneft, “as a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine.”
The Donald Trump administration in October 2025 had carried out the decision to put pressure on Russia’s state finances, adding the country’s two largest oil producers, Lukoil and Rosneft, to its blacklist of sanctioned entities. The US had initially given the oil firm one month to sell the holdings before gradually extending it as negotiations dragged on.
Lukoil had announced that same month that it would sell all of its international assets, initiating a formal process to receive bids from potential buyers.
After months of negotiations with potential buyers and one preliminary agreement with Gunvor blocked by the US Treasury, which described the trading group as “the Kremlin’s puppet”, it has now signed an agreement to sell Lukoil International GmbH to Carlyle.
Companies working with the sanctioned firms risk secondary sanctions that would deny them access to US banks, traders, transporters, and insurers.
The agreement is not exclusive and is subject to conditions such as the procurement of necessary regulatory approvals, including permission from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) for the transaction with Carlyle.
Carlyle said that the agreement “has been structured to be fully compliant” with US Treasury policies and that it was “conditional upon Carlyle’s due diligence and regulatory approvals”.
Prior to the Carlyle news, other US oil and gas supermajors Chevron and ExxonMobil, and International Holding Company (IHC) of Abu Dhabi expressed interest to the US Treasury to potentially acquire Lukoil’s international assets.
The sale would further dent Russian economy which has been struggling because of its war in Ukraine and Western sanctions have increased inflation and slowed economic growth. In 2025, the country’s oil and gas revenues, which make up about a quarter of government income and help fund the war, fell to their lowest level in five years.
By Adedapo Adesanya
The chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mrs Oritsemeyiwa Eyesan, has assured investors of a transparent, merit-based and competitive process for Nigeria’s 2025 oil and gas licensing round.
Mrs Eyesan, gave the assurance on Wednesday while speaking at a Pre-Bid Webinar organised by the commission, noting that only applicants with strong technical, financial credentials, professionalism and credible plans would proceed to the critical stage of the bidding process.
The NUPRC in December 1, 2025 inaugurated Nigeria’s 2025 Licensing Bid Round, offering 50 oil and gas blocks across frontier, onshore, shallow water, and deepwater terrains for potential investors.
The basins included Niger Delta basin, with 35 blocks, Benin (Frontier) with three blocks, Anambra (Frontier), with four blocks, Benue (Frontier), with four blocks and Chad (Frontier) with four blocks on offer.
Mrs Eyesan explained that the licensing process would follow five stages: Registration and pre-qualification, data acquisition, technical bid submission, evaluation, and a commercial bid conference, with only bidders that meet strong technical and financial criteria progressing.
The NUPRC executive said the 2025 Licensing Round represented a deliberate effort by Nigeria to reposition its upstream petroleum sector for long-term investment, transparency, and value creation, amid increasing global competition for capital.
She said that energy security and supply resilience had become key global economic and geopolitical priorities, while investment capital was increasingly selective and disciplined.
“Our national priority is clear: to attract capital, grow reserves, and improve production in a responsible and sustainable manner.
“A structured and transparent licensing round is essential to achieving these objectives.
“The NUPRC is legally mandated to conduct licensing rounds in a periodic, open, transparent, and fully competitive manner and the entire 2025 process will be governed strictly by published rules,” she said.
The official further revealed that, with the approval of President Bola Tinubu, signature bonuses for the 2025 round have been set within a range designed to lower entry barriers and prioritise technical capability, credible work programmes, financial strength, and speed to production.
She emphasised that the bid process will fully comply with the Petroleum Industry Act (PIA) and remain open to public and institutional scrutiny through the Nigeria Extractive Industries Transparency Initiative (NEITI) and other oversight agencies.
By Adedapo Adesanya
Four price losers weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.06 per cent on Wednesday, January 28.
The decliners were led by Afriland Properties Plc, which lost N1.53 to close at N14.50 per share compared with the previous day’s N16.03 per share, Geo-Fluids Plc dropped 50 Kobo to end at N6.35 per unit versus Tuesday’s price of N6.85 per unit, Central Securities Clearing System (CSCS) Plc declined by 35 Kobo to N40.15 per share from N40.50 per share, and Food Concepts Plc decreased by 28 Kobo to sell at N2.72 per unit versus N3.00 per unit.
As a result, the market capitalisation of the bourse went down by N1.3 billion to N2.173 trillion from the N2.174 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) fell by 2.17 points to 3,632.56 points from Tuesday’s 3,634.73 points.
In the midst of the profit-taking, some securities witnessed bargain-hunting, with Nipco Plc gaining N22.00 to close at N242.00 per share versus N220.00 per share of the previous session, FrieslandCampina Wamco Nigeria Plc improved by N4.00 to N68.00 per unit from N64.00 per unit, and Acorn Petroleum Plc added 8 Kobo to finish at N1.38 per share versus N1.30 per share.
At midweek, the volume of securities transacted by the market participants surged by 259.9 per cent to 4.7 million units from 1.3 million units, but the value of securities went down by 8.6 per cent to N52.4 million from N57.3 million and the number of deals shrank by 15.8 per cent to 32 deals from 38 deals.
CSCS Plc remained the most traded stock by value (year-to-date) with 15.3 million units exchanged for N622.4 million, followed by FrieslandCampina Wamco Nigeria Plc with 1.6 million units valued at N108.4 million, and Geo-Fluids Plc with 8.9 million units worth N60.3 million.
CSCS Plc was also the most traded stock by volume (year-to-date) with 15.3 million units sold for N622.4 million, followed by Geo-Fluids Plc with 8.9 million units exchanged for N60.3 million, and Mass Telecom Innovation Plc with 8.4 million units traded for N3.4 million.
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